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HMO to give doctors final say on treatment

NEW YORK -- Abandoning the bedrock principle underlying managed care, UnitedHealth Group says doctors, not health plan administrators, will now have the final say on which treatments it will cover.

United is the nation's second-largest health insurer, covering 14.5 million people.

The move accelerates a trend among health maintenance organizations to give doctors and patients more freedom. But it raises questions about how HMOs will control rising costs and whether consumers will be best served by a return to the ''doctor-knows-best'' philosophy.

United said its decision makes fiscal sense because it was paying more money to scrutinize and deny questionable treatments than the practice saved.

United will still ask doctors to justify such decisions as ordering surgery or expensive diagnostic tests. And the change doesn't mean that United will pay for services that are currently not covered, such as cosmetic surgery.

But under the new policy, the doctor will have the final say on how the patient will be treated, the company said Monday.

United said doctors will be evaluated over the long term instead of case by case, and those found to be practicing wasteful medicine will be dropped from the health care network.

''This is a double-edge sword for patients,'' said Charlie Inlander, president of the People's Medical Society, a consumer health group based in Allentown, Pa.

He said doctors and consumers will benefit from no longer having treatment delayed or rejected -- a major complaint that has prompted patient rights legislation in Congress and lawsuits against HMOs.

However, managed care is also intended to protect consumers from falling prey to unnecessary or ineffective procedures.

United's approach could result in higher insurance premiums, said John Erb, a health benefits consultant in Boca Raton, Fla. ''The corollary here is: Be careful what you wish for, you might get it,'' Erb said.

Karen Ignagni, president of the American Association of Health Plans, said she expects more plans to follow United's strategy.

''Doctors and health plans are going to work collaboratively,'' she said. ''Health plans are evolving to respond to the key objectives of patients and physicians.''

Dr. Thomas Reardon, president of the American Medical Association, said: ''Doctors will receive this news well. We've always advocated that it should be doctors making the determination of what is medically necessary.''

The ability of HMO managers to overrule doctors' decisions about what procedures and services are medically necessary -- and thus covered by insurance -- has been a basic rule of managed care. It also has been a policy that HMO officials insist was responsible for bringing down the steep health cost increases of the late 1980s and early '90s.

Doctors and patients have argued, however, that the policy put patient care in conflict with HMO profits.

In response, United and other HMOs in recent years have relaxed many of their stringent rules. They have reduced the number of procedures requiring pre-approval, allowed patients to go directly to specialists in the health plan's network and have given patients the ability to appeal coverage decisions to an independent arbiter.

Some observers noted United's move might also have been spurred by liability concerns. A number of leading trial attorneys have sued several leading health plans in the past two months.

Rep. Greg Ganske, R-Iowa., a key backer of House-backed legislation to make health insurers more accountable to patients, said United's move was ''sort of an admission on eir part that their management techniques have not only been wrong for the patient but it's been wrong for them, for their bottom line.''

United was one of the first major health plans to evaluate doctors against their peers and national standards on a variety of criteria such as giving mammograms to women and vaccines to infants.

United has provided the information to doctors, and soon will be giving it to members.